Romneycare’s 98% Success Rate Defies Gripes on Obama Law

Massachusetts then-Governor Mitt Romney signs into law a new health care reform bill during a ceremony at Faneuil Hall on April 12, 2006 in Boston. Photographer: Joe Raedle/Getty Images

March 26 (Bloomberg) -- The success of the Massachusetts
health-care system is spurring President Barack Obama to extol
the virtues of a law Mitt Romney signed as a governor.

Romney, running for the Republican presidential nomination,
says it shouldn’t be the model for every state.

About 98 percent of state residents are insured under the
legislation Romney signed in 2006, a 10 percent rise from the
previous three-year average. Government costs haven’t ballooned,
officials say, and 63 percent of residents support the law. Yet
Romney is promising to repeal the 2010 U.S. law Obama and his
fellow Democrats fashioned on the Massachusetts program.

“It’s a crazy awkward situation,” said Stuart Altman, a
professor of national health policy at Brandeis University in
Waltham, Massachusetts, by telephone. Romney “can’t take credit.
I wish he could; it’s one of his real accomplishments.”

Barack Obama on March 22 told National Public Radio the
state law’s success was a model that will make other Americans
say: “Why aren’t we trying it as well?” A day later, Romney
wrote a USA Today opinion piece saying the state law’s
provisions shouldn’t be foisted on others.

While Romney’s primary foes attack both health plans, and
the Supreme Court begins debate today on the U.S. mandate’s
legality, Massachusetts has brought the idea of health-coverage-for-all to life, the state law’s designers and operators say.

‘Guy in a Bar’

“It’s funny,” Altman said. “I was talking to a guy in a
bar who said he supported the Massachusetts law, and then he was
very critical of the national law. I said, ‘what’s up with
that?’ He didn’t want to go there, but I think it shows the
situation Mitt Romney is in.

“What you have are people who are Republicans who are
accepting the party line nationally, but locally find the law
has worked out just fine for them,” he said.

About 16 percent of Americans, or 50 million people, were
uninsured in 2010, according to the Kaiser Family Foundation, of
Menlo Park, California. Under the U.S. health-care overhaul,
most people would be covered under a process that begins in 2014.
First, though, the need for everyone to have insurance faces a
Supreme Court challenge by 26 states that say it is
unconstitutional. The legal debate will begin today.

The Obama administration argues the mandate is needed
because patients who aren’t insured have their care paid for
indirectly by people who are, in the form of higher prices that
can bleed across state boundaries. Opponents counter that the
U.S. Constitution doesn’t give Congress the authority to
regulate what people don’t want to buy.

‘Genius of Federalism’

Romney offers a different view. He supports “giving each
of the 50 states the resources and the responsibility to craft
the health-care solutions that suit their citizens best,” he
wrote in his USA Today opinion piece.

The Massachusetts law “got our citizens insured without
raising taxes,” the article says. “Other states will choose to
go in different directions. It is the genius of federalism that
it encourages experimentation, with each state pursuing what
works best for them.”

The commentary doesn’t address how Romney views the state
law’s individual provisions. A campaign spokesman, Ryan Williams,
wouldn’t comment further, instead pointing to the former
governor’s comments in a Jan. 27 primary debate.

The Massachusetts system “has a lot of flaws, a lot of
things I’d do differently,” Romney said then. “It has a lot of
benefits. The people of the state like it by about three to one.
We consider it very different than Obama Care.”

Others disagree about the differences.

‘More Ambitious Version’

“The federal reform is simply a more ambitious version of
the Massachusetts reform,” said Jon Gruber, a professor of
economics at the Massachusetts Institute of Technology in
Cambridge who helped policy makers write both laws.

“Within three years, we should see that the federal reform
has covered the uninsured and stabilized the non-group market”
covering individuals who now face much higher premiums, Gruber
said in a telephone interview.

A 2011 poll by the Boston Globe and the Harvard School of
Public Health showed that 63 percent of Massachusetts residents
supported the state law. The U.S. law has an approval rate of 41
percent, and an unfavorable view by 41 percent of those surveyed,
according to a monthly tracking poll by Kaiser.

The Massachusetts law has “turned out to be a success,”
said David Cutler, an economics professor at Harvard University
in Cambridge who helped policy makers draw up the law, in a
telephone interview “People have gotten coverage. They got
coverage at the rate we thought, and at the cost we thought.”

Obama Prediction

Obama, in the NPR interview, predicted the U.S. overhaul
would gain public support as its benefits kick in. “When
people see that in fact it works, it makes sense -- as it is, by
the way, working in Massachusetts,” he said.

Ben LaBolt, a spokesman for the Obama campaign, criticized
Romney’s stand on the Massachusetts law, saying in a statement,
“It’s amazing how far Mitt Romney has come in his beliefs.”

Mary Flynn, 60, who has gained from the Massachusetts law
said of Romney, “I’m glad that he did what he did for the
people of Massachusetts.” His stand now that he’s running for
president, she added, is “politics. He’s going for what he
thinks is going to be appropriate for him now.”

Flynn, a public relations executive in Boston, left her job
in February 2011 to start her own company. She signed up for
COBRA health insurance from her former employer, whom she
declined to name, as she was leaving. In August, she got a
“very terse letter” from the company telling her it had
dropped her coverage in May, after an address error on her June
invoice caused her to inadvertently miss a payment.

Inhaler Costs

Flynn has asthma and uses a drug inhaler, Advair, that
costs $210 a month retail through drugstore.com. She paid $60 a
month for it through her COBRA plan, before it was canceled. She
then turned to the Massachusetts Health Connector, the state’s
insurance exchange created in 2006 under Romney.

“I felt like they threw me a lifeline,” she said, adding
that her inhaler now costs her just $3.50 a month. “It’s the
best insurance I’ve ever had.”

The Massachusetts law, like the U.S. overhaul, mandates
that most residents be covered by health insurance, and fines
those who aren’t. It offers subsidies to low-income people to
help them gain insurance and has broadened Medicaid to help out.

Massachusetts Against the Individual Mandate, which started
a petition drive last year to remove the insurance requirement,
gave up after deciding other priorities were more important,
said Anne Fox, an organizer.

Small-Business Effect

When it comes to opposition to the Massachusetts
legislation, “there isn’t as much as you would expect,” said
Fox, president of Massachusetts Citizens for Life.

The group may try again in 2014, partly depending on the
Supreme Court ruling, she said. One concern Fox’s organization
has is that the state mandate may hurt small business, keeping
them from hiring workers full-time to avoid a threshold that
requires they supply a health plan or be fined, she said.

Lora Pellegrini, president of the Massachusetts Association
of Health Plans, a Boston-based nonprofit group, said supporters
of the state law are concerned about the local impact should the
Supreme Court eliminate the national mandate.

“We’ve always been nervous here that there could be a
state court challenge,” she said in a telephone interview.
“There’ve been rumblings, but nothing’s ever materialized.
We’re watching what the feds do because they give people ideas
locally.”

No Budget Buster

One reason the law hasn’t been successfully attacked is
because it hasn’t had the budget-busting effects opponents had
predicted, said Glen Shor, executive director of the
Commonwealth Health Insurance Connector Authority, in a
telephone interview.

“There were concerns that there would be spiraling
spending and out-of-control cost overruns,” said Shor, whose
authority was set up by the law to offer state-subsidized
coverage to those below a certain income level. “That has just
eminently not been the case at all.”

The rate the state pays insurers to offer subsidized
coverage has grown at no more than 3 percent, and more
businesses are offering health coverage instead of dropping it
to let workers sign up with the state, he said.

While the Massachusetts law drew bipartisan support within
the state when it was passed, it’s been targeted by opponents of
Romney’s quest to gain the Republican presidential nomination.

‘Romney Care’

Romney is “the same man who gave us Romney care and
advocated for Obamacare,” said Rick Santorum, the former
senator from Pennsylvania who is also seeking the nomination at
a March 18 rally in Illinois.

He called Romney “uniquely disqualified” to run against
Obama and the federal health law for that reason.

There is still work to do in Massachusetts, according to
people who support the law. While the price for health plans has
been kept relatively steady, treatment costs are rising as the
number of insured people seeking care has increased.

Per capita health-care spending in Massachusetts has been
the highest in the nation since at least 1998, according to a
2011 study in the journal Medicare & Medicaid Research Review,
published by the U.S. Centers for Medicare and Medicaid Services.

Dealing with those costs is a doable next step, according
to Harvard’s Cutler. “Unlike poisonous Washington debates, at
the state level you’ve got to get stuff done,” he said. “You
can’t just score cheap shots all day.”

Handcuff Spending

State lawmakers are considering a proposal to handcuff
health spending to the state’s gross product, with the goal of
having health costs grow no faster than Massachusetts business
and government can support, said Pellegrini, of the
Massachusetts Association of Health Plans.

“It makes a lot of sense,” Pellegrini said by telephone.
“Health care needs to reflect what’s going on in our economy.
There’s going to be a lot of debate about what the right number
is. We don’t want to cut too deep, but we want to do something
that’s meaningful to get spending under control.”